The AI Driven Customer Experience Evolution - Matt Price - Crescendo - Episode #78

I was able to get on the right bus and get with the right people, and the rest is history.

Welcome to Not Another CEO Podcast. I'm your host, David Politis. Every week we talk to inspiring leaders and get the true stories, the ups and downs, the lessons learned, and come away with actionable advice for our own journeys.

Today's guest is Matt Price, the CEO and co founder of Crushendo. Matt is one of the most experienced and respected operators in the world of customer service. He spent more than a decade at Zendesk, where he helped scale the company globally and eventually led Zendesk Labs, the group responsible for driving innovation and incubating new products that push the company into its next chapter. Crushendo, which is his new company, is pioneering a model for customer experience that blends advanced AI with trained specialists to deliver fast, high, high quality support at scale. In only 18 months, Crushendo has raised $50 million from firms like General Catalyst and Celesta, and they're on Track to cross $100 million of revenue before the end of this year. It's quickly becoming one of the hottest companies in the category. Please welcome Matt Price.

Thank you so much. It's great to be here.

I'm excited for this first question, the question I ask every guest. What is the one thing you've done, big or small, at Crescendo, that's had the biggest impact? And you do again if you're CEO of another company and in the future.

I've been able to assemble an amazing team very quickly, and it's had far and away the biggest impact of anything else that we could have done.

When you think about, when you talk about team, is that leadership team across the board? Like, you know, because where is that?

Yeah, it started. It started with leadership team. The we were really fortunate to be connected with an amazing engineering and product team early on who already had momentum. And they're the team that built the Genesis cloud product in the past and had created some amazing things with AI. So that's an example of just really bringing in very, very high quality founders to hit the ground running. And from that point on, we've been able to pull in people from.

Salesforce experience, Groq experience, obviously Zendesk experience, as well as really great blend of talent.

What is the number one attribute you look for in people that you bring on, you know, early stage crazy growth? Like, what is that number one attribute that you look for?

Curiosity and passion for the vision that'll take us so far? You know, the hygiene factor is they have to have done the job before, they had to know what they're doing. But there's a lot of people out there who have had these roles. But finding that unique combination of somebody who's incredibly passionate and really curious about the mission is key to us.

Do you think that those people have to come from the space? Like, like you? Obviously you know the space better than anyone. Do these people have to come from the space or can they, they be from outside of it, but just still have a passion for, for that, you.

Know, they, it's not essential, but it helps because the people who have been in our space for a while have been trying to move the needle for the last 20, 30 years on improving customer care. And to be honest, we haven't made that much progress. You know, people are still waiting in queues, they're still getting bad experiences. The AI is changing all of that and radically. And so people who come from the space and have experienced the past are well suited to talk about how the future works. And that's one thing that's unique about our team. And our group is pretty much everybody who's creating the solution has worked or led within customer care. And so our offering comes from that experience and wasn't spun up in an AI lab somewhere from people who've never sat in the role.

And when you talk about this, I mean, I am actually very passionate about customer experience, customer support. I, I had a terrible experience in my first company of how we treated our customers. And I swore to myself we're going to do it a completely different way. And we were huge Zendesk customers for a long time. And really like, I'm very passionate about it. Why do you think that it hasn't changed? Was it just technology? I mean, was the problem that I didn't exist? You know, is that, was that the problem at the end of the day?

I mean, in many respects, yeah, but from a bigger perspective it was. Customer care was constrained by the economics and in order to deliver customer care up until now you had to put humans in a lot of people in and you know, people tried to find different ways of making processes a bit quicker, doing a bit of self service, maybe using people who were, you know, in lower cost, lower cost centers. But really these were fractional incremental changes. For most businesses.

The competitiveness of their product didn't allow them to spend large amounts on customer care. In fact, only a few companies could. Right, so American Express maybe or Apple premium priced products where they baked in customer care into their offering. But for the Rest of the world, we were constrained by that fact and AI now changes that. AI puts us into a world of abundance and we need to shift our mindsets now as CX leaders, not from how do I deflect customers, how do I make sure things are just not too bad to a world where we have a palette of so many options in order to serve customers. So we're moving from being deflectors to creators and innovators.

I love that this company, you're one of the faster growing companies and top two, three that I've had on this show, it's crazy. I think the growth is, is amazing.

I mean to go from 0 to 100 million in 18 months, 24 months, whatever it ends up being, is still is, is a crazy fast amount of time. How is the company changing? Like in is it a new company every week, a new company every month? Like you know, I've experienced this but for me it's over a period of 10 years, it's a new company every two or three years. This feels to me like it could be every month or quarter. Like how does that, how are you dealing with that?

Yeah, I mean there are parts of the company that, where change is not hugely significant, you know, where, whereby we're actually delivering service and we're operating with, tuning and evolving that. But there are other parts of the organization that are moving incredibly fast. And you know, the AI world, there are constant changes in the tools available to you and the innovation you can create. So we have to make sure with it from a product perspective we're constantly taking advantage of those and deploying them very quickly. So for example, we just released a new capability of multimodal where you can do chat and voice and share images all in one window, all at one time, which opens up a whole new possibility. But. And then of course there's the scaling of how many people we've just hired 50 people and go to market. Well, that changes things radically. Clear about how you approach. You can't be doing founder led sales anymore when you've got that scale. I mean the trick is really just trying to think ahead but also sensing and responding. If you see an indicator, drill into it quickly and see what you need to do to tune and fix. But fortunately, like I said, I've got an amazing leadership team who has experienced. Yeah. And during these things, how fast is.

I'm most curious about like the leadership team.

Because to your point, you have to have a good leadership team to evolve this fast, to make that many hires, to make these like you, you have to have. How do you operate as a team? Like is that is a daily standup, a weekly meeting? Is it, you know, one on ones. Like where do you, if you have to look at the way your leadership team works, where what is the, the core that everything kind of revolves around?

Yeah, I mean there's a, there's some basic principles on, on how we operate. I mean the first one is if something needs to be done, we have somebody who's accountable for leading that and delivering it. So it's either in their function or if it's something cross functionally, then we have no ambiguity about who's leading leading. The second thing is pretty much any decision that needs to be made or any communication needs to be made needs to involve more than one person. So we don't do a lot of one on ones at all. We'll do one on ones when people come into the business to help them ramp. But after that, typically it's a group or it's a group thing. So if we're talking go to market, it makes sense. I have my head of marketing there and my head of revenue there in the same conversations because pretty much anything we talk about businesses and then what we do is.

Have.

A couple of meetings weekly where everybody gets together, there'll be some agendas and then we have walk ons and that's where people can bring in issues that need to be resolved. And again, the outcome of that needs to be an owner or prioritization of what we do. And then the final thing is.

You.

Know, our company works quite remotely, but I have an open door policy. Somebody people can call myself, I call people, I randomly call the team. I'm a member of the team every morning on my commute. They love it. You know, it's a bit rich, but keeping those communicating informal channels open as well. So yeah, a number of ways we.

Work it, but what I hear from you is being in constant communication with each other. And one of the pieces of feedback I got as a leader from my head of people at one point she said, Dave, you're this hub and we have this hub and spoke model where you're the hub and everyone has meetings with you and then you go and tell other people what happened in the meetings. You said this is crazy that everything takes so long. What I'm hearing from you is actually you don't really have that hub and spoke. Every time you have a meeting about a subject, anyone who needs to be involved in that is in that meeting and you're Having that conversation together and someone comes out as the owner of whatever gets decided that's right.

And the best scenario is when that happens and I'm not in the room and it's just happening within the organization. You know, the connecting and making it and making it working, you know, that's, that's scalability starting to, you know, filter into the organization.

How many people total are in the org now.

Well, I think I mentioned that we have a unique offering where we have AI first, where we deliver AI agents in order to support customers. But we can back that up with humans in the loop, or some people call it forward deployed.

Resources. And that can be as simple as helping a customer with knowledge management and AI deployment. We wrap everything in and so there's no incremental cost all the way through to handling level one or level two or even level three support. So for some customers, we manage the whole support. They have one person and then these are, you know, large $50 million plus companies, one person. And we are their support partner now. And so this is again reflecting in your area. So to answer your question, where a few thousand people now increasing, increasing gradually and a lot of those people are helping our customers deliver service.

And then a number of people are obviously within our core engineering and our go to market teams as well.

The thing that you said that actually now is kind of sticking with me, this thing of the problem with support was the economics, which makes a lot of sense. And what I think is there's like this, this kind of thing right now around AI of a question of is the solution just AI. But when you think about delivering an amazing experience, if you go all the way to that extreme, you, you do lose a lot like you, you can go the other extreme, you could basically create a separate problem which this human in the loop. When we first started talking, you explained it to me, I was like, wow, this is a kind of interesting thing because you, you know that at least there's a person there to make sure that that experience is positive. But they can do so much more because of the technology and what the technology can do.

You're exactly right. And so what we see with the customers as we move them onto an AI platform or AI first platform is firstly, we're incredibly careful on quality. In fact, we have a full quality guarantee. So we only charge per outcomes and an outcome is a resolved.

Customer inquiry. And.

In that case we're just incredibly focused on making sure that there's high quality. What that means is we don't try and get the AI to do too much at first.

Because the worst experience is you come onto an AI, it's gonna maybe reasonably good. But the AI is being trained to try and keep you, keep you there.

And then so either starts making mistakes and, or you get in this loop and you have to.

I was just gonna say I just had this yesterday and I got into an endless loop and I was like, please get me out of this. And I'm a pretty technical person. I was trying all kinds of things to get out of a loop and I'm like, this is gonna crush me.

Yep. And so what happens there is that eventually maybe you get flipped to.

A human. You're able to actually move to a lot of people. You know, you can get pretty high AI automation. You know, a lot of people talk 50 plus, you know, 60, 70%. A lot of time. What a lot of people don't think about is they think, oh, that's good. But then until you think about the other third of people and what their experience is like and they have to go through this AI discussion and get to the point and you know, then they get transferred to a human. Well, what most customers have not done is change what the handoff is to the human. So they bolted on AI and then you go through this whole process with, with the bot and then you get transferred to somebody who is a rookie agent who really just in many cases doesn't have the as much knowledge as the AI. And then you have to start again and work through. And that's where we see a lot of negative experiences with bolt on bots.

Actually driving lower customer sand in organizations. And obviously what we do is we've redesigned the whole experience from the bottom up. And so we'll work with our customers to make sure that those handoffs to humans and the quality of the human is very good. Make sure staffing can be done.

In a way that's live.

In many more hours. So what we do is we take the savings from the AI, but make sure, making sure that we're restructuring routines to improve customer care all around.

You talked about AI is evolving so quickly that from a product perspective you have to keep kind of using the technology in the best way. And I talked to a friend who's at one of the coding assisting companies and he said there are weeks where things that are coming out in the world are so, so fast, they'll like launch something and then two days later after relaunch the thing because now there's a new technology. I was like, how's that even and they have a lot of customers. And how do you do. I mean, that is the fastest iteration of, you know, that, that I've ever seen. You're at Zendesk. I was a very happy Zendesk customer. But it took a long time for, you know, these things to come out and the feature releases. Like, how do you do that? And really specifically, how do you do that in a way where it doesn't break all the workflows and everything that's going on, you know, across all your customers, all your agents? Like, how do you do that?

It's a great question.

It was the time that I spent at Zendesk and in product companies and I say Zendesk is top class, you know, organization that made me want to do something slightly different when I created my own company. And.

Within the technology company, it is hard because you have these processes. An engineer will have an idea. It then goes through product review cycles, then maybe it gets on the product roadmap and time is assigned to it and then they develop it and then it gets packaged and reviewed and then it gets localized and then it goes into early testing with customers and then finally you release it to the customers. Then you kind of think that everybody is just going to adopt it.

And then six months later you've got 5 or 6 or 10% penetration of this wonderful new feature that you spent all this time doing. I want to do it slightly differently. And one of the amazing things about the model we have is that we have product engineering, but the people who are using the software sit within the same company as well. The feedback loop is incredibly tight. So not only are we able to get feedback immediately as to how well what we're developing is working, but when it gets deployed, we can enable it incredibly quickly and then make sure it's actually being deployed well based upon our forward deployed resources. So this for us at least is creating an incredibly tight feedback loop where we can have something in the labs, you know, in one week or a couple of days, and then deploy on a customer account.

You know, in hours or if a customer has identified a special need. I'll give you an example in the. When we first released our voice product.

We realized that.

It wanted to refer people to URLs sometimes or refer to other information. And so but speaking a URL is done because they're calling you for a reason. So, you know, within hours we were able to turn on a feature where that would be SMS to the client. And that's a very tight iteration. It's not A huge amount of engineering, but it's something that can be turned on and then tested within that client, observed very quickly and then propagated through the rest of the.

Customer base. Those are the fun things. Seeing this quick in our iteration and.

Learning that having the employees of your company be the users of the product, that is not to be understood. That makes a lot of sense because then you can iterate much faster because the communication loop out to the world and to your customers and explaining and do you want to be on this release cycle or this, you can actually control that entire.

Vertically integrated all the way through.

And that's exactly the right way to think about it is the vertical integration. That doesn't mean that we have to do everything. You know, we'll partner with our customers and you know, if they wanted to just take our AI, we can, we can do that. But more often than not, in order to really make it work, they may be lacking a couple of hires or some skills and we'll backfill those immediately such that they can get to market very quickly. And you know, we typically have customers live within 30 days, which is, you know, really good within the industry.

On icp, who is the ICP for this like and how narrow is that? Because I, I don't know. When I, when I heard this for the first time, I hadn't heard of Crescendo and then I heard it, started looking it up, then started talking to people who use it. My, my sense is that pretty much anyone could be a customer. I mean you could have huge customers, you could have tiny custom like anyone could be a customer. Like how tight are you on that icp?

We have customers who range from very large enterprises, international.

Companies, all the way down to companies that maybe have $10 million in revenue.

The exciting thing about our model is the way we can forward deploy resources and we have a whole pool of people who can help on that is it's incredibly scalable, you know, so it scales down as well as scales up.

But we think obviously the way you serve customers and you address customers within certain markets needs to be different. So we have a very fast growing mid market.

Organization which is very much based upon speed, getting customers up and running, managing their customer service operations. And then we have an enterprise operation where we engage with organizations who are bigger, may have, maybe have some unique requirements and we support them separately. So you know, I would say our core ICP is the mid market, but moving very quickly up market now as more and more organizations want to take.

Advantage of this, this Is your first job as CEO, you've been in a bunch of executive roles, but then your first job as, as founder CEO. Is this something that you always knew you wanted to do and you were just waiting for that right opportunity or was it like the right opportunity that spoke to you that said I need to be CEO, you know, founder, CEO. Does that make like. Because I, I, I asked this question because I talked to a lot of people who are executives, who've been executives at many companies, been very successful, and they'll tell me I'm not ready to be CEO. And I'm like, I don't even know if there's something to prepare you to be ready, you know, like, I don't know how much more, you know, you know, how much more experience you. So I'm just curious, like, was this something you were kind of building towards in your career explicitly, or is this something that just came about? You said, I have to do this.

I was much more focused in my career as I've been through a number of waves. Young and age myself here, but the PC way, you know, the client server way, the, the Internet wave and dot com and then SaaS. So I'd be fortunate to be with go through each of those waves and within each one.

An iconic company, you know, or such as Zendesk, for example, on SAS waves. So I'm much more concerned about.

Being part of a new technology wave and being within an amazing company that's been part of that and I've had the opportunity to do it. So.

It really doesn't matter to me the role I've got, as long as it's interesting and it's, and I can make a difference now. It just so happens within the AI wave, I guess I had enough experience and I've done enough things whereby, you know, I was qualified to be a CEO at this particular point in time. And that's how I landed to do this. I'm not necessarily seeking it, but.

That it's much more about being involved in something new and being on the right bus, being in the right company.

And you worked, if I understand correctly, you worked with General Catalyst kind of to get this thing really together off the ground, Is that correct?

That's right. General Catalyst have an incubation program called the Creation Program. And what they'll try and do is, I mean, obviously incredibly smart people are constantly looking at market trends and look for market opportunities. And so they identified a market opportunity in our space. The BPO industry, the market for labor in customer care is half A trillion a year and that's conservative estimates. Massive market.

Obviously AI is going to hugely disrupt that. So the thesis is.

Can we build a company or can we find a company to invest in that's going to. That can do this the right way? And they were unable to find a company that was right. There's plenty of bolt on bots out there, but no company that was addressing the whole approach. So they had the idea to create one and pulled together a number of founders with expertise and disciplines in order to how to do that. Andy Lee from Alorica.

Such a humble guy but built from scratch a $2 billion plus contact center business all around the world. And Anchandra Sikaran who was at Both meta and CPO5 9 and then.

I was fortunate enough to be connected because they needed an operator. So I was then bought in Mixer. So yeah, pretty unique founding story and obviously with General Catalyst being able to provide us with the financial backing to move very quickly.

Yeah, that's. It feels to me like this is becoming a more. I'm hearing more of this from some of these really big successful firms that they, they're going all the way to inception kind of phase, you know, the stage and they have the opinions, they see the market, they see so much in the market and they kind of go down to this stage and it's a, it's an interesting model. I've. I've had conversations with a couple of them about different things in the IT space and everything. And it's a, it's an interesting model because as a founder you really do de risk in a good way. You de risk a lot. Like, you know, I think one of the biggest challenges for a lot of, A lot of the reasons that people do not become founders is purely the risk of will I be able to fund this? Will I be able. Like that. That is. I think there's a lot of people who'd be amazing founders. They just literally cannot take the risk with their family and they're this and they're that and like. And so having this model for me is actually quite interesting because it feels like.

Really gives you the ability to found the company for the right reason, which is like there needs to be this company but you don't. You can remove at least some. I mean of course you're taking risk and everything, but you're, you're releasing at least some of that fear is that. Does that resonate like that?

Yeah, it's, I would say it's, it's very friendly model for experienced Founders and operators because of the reasons you explained and obviously because of that, you get a lot of benefit because you have people who are experienced in running this.

That's what I'm saying. These are the people that wouldn't meet. I mean I don't, you know, I don't know every person who goes through it, but I know some that have, that would never do it if it wasn't for this model. But they're very good.

That's right. Or they've done things before and they want space to be able to, you know, evolve it and focus on the problem at hand and to your point, worry less about fundraising and also use the network to be connected with other people who can help on, on the project. So, so you're right, right out of the gate, a company like Crescendo has a much, much bigger chance of being, you know, a multi billion dollar company than if I'd gone, if I'd gone and locked myself in a basement for, for, for three to six months and tried to figure out what we should be doing.

You know, you as CEO, what is the one thing that you think thought would be easy about the job but turned out to be hard?

Such a good question. Like everything now it's set.

I think.

Something I didn't really think about so much was part of your job is to really.

Keep the company focused. You know, when you are a fast growing company in a fast growing market, you get so many opportunities come to you. So many of them being flattering, you know, large partners wanting to partner with you, everybody wants a conversation with you. And being someone, I wouldn't say ruthless, but being polite on the assessment of okay, does this help us get to our next stage, you know, where we're at and does it help us to get to where we are? So I think I, I underestimated the amount of inbound and the lot of interest that there would be in the business, which is obviously very flattering. But thing that comes with that is also making sure that you're spending on time what matters today rather than, and then on the immediate horizon. And so, and that means that's about getting customers successful, you know, and then building from.

Yeah, that, that advice if, if people take, there's a lot to take away from this so far but if they take that away, that may be, that's such important advice. I talk to so many, so many CEOs who say, oh, I got to, you know, this workday reached out to me. Salesforce reached out to me. Google, I said okay, you know, bank of America wants to buy my product. I'm like, you don't even have a single customer. Bank of America reach out. Like they're not buying your product. Like, let's not even waste the energy on, on, on this. But it is very. You said it interesting. Like you feel it's flattering. You kind of get some outreach of Salesforce wants to talk to me and, and you're like, okay. Then you realize, first of all, half the conversations are then just digging because they just want to copy whatever you have. And the other part of the conversations are them, you know, just like learning and talking and blah, blah, blah, blah. But it's going to be years if anything ever comes of it. And it can put you. I mean, it can literally be such a distraction for the CEO because of course they want the CEO involved and they want this. And like, so that's. That advice is. That is gold.

Yeah. I mean, many cases, I mean, it's rare that I won't take a conversation with this. It's good. I mean, it doesn't have to be long and to. You learn a lot from the engagement, what people are trying to understand and where they're coming to. I feel like part of the job of the CEO, though, is also to protect the organization from anything that would be a distraction. So as many cases, I'll keep the relationship going and when I feel the time is right, then I'll involve other people from the organization rather than having them spinning up wheels. Because.

The challenge then is that, oh, this has come from the CEO and it's a big brand, therefore I need to make there, I need to make sure I absolutely put all my best effort into this. Whereas after all you want them to do is put 3% attention, focus on their main job. So, you know, making sure that that alignment works, you know, and that's the other thing from a, you know, CEO perspective, I'm sure other people will understand is.

Just being respectful of when you ask somebody to do something, especially as the company grows, that thing becomes very important to them, you know, just by the very nature of it, it's the CEO asking them to do it. So being careful about spinning up ideas or if you're brainstorming, making sure that something is being that the person who you're working with in that moment understands what their expect, your expectations are, what they should or shouldn't be doing. After that conversation, when you say, you.

Know, I think we don't. CEOs, I think, want to talk to most of them, including Myself, you know, we all have imposter syndrome. Most people have imposter syndrome to some degree. And you think to yourself, like, okay, I have the title of CEO, but I'm just like anybody else. But then to your point, sometimes that is. Is not. I mean, it's true to yourself. But when you say to someone, hey, I think we should do this, they say, oh, the CEO, Matt said. And now it all becomes. It becomes. They probably telling their colleagues, and I gotta work, Matt said, especially if you.

Grow really fast, you know, I mean, a year, just over a year ago, you know, we all knew each other. You know, it's like 10, 15 people. And so you have to change your operating communication patterns when you're, you know, when you're thousands of people within an organization and there's this constant recalibration of understanding of, of.

Where you are in the business and how. And how you should be communicating and how you should be interacting with team members. Because not everybody in the business you've had a chance to have a beer with or a coffee with.

Yeah. And so it's. I think it's an important point, you know, just constantly thinking about what that impact is on the business and making sure that you're not distracting people.

Right. On the flip side, you can actually use that as you're saying all this to me. You can use it on the flip side, which is you calling someone or saying, good job or something like that. A small thing means.

So much to people just because again, you have the title, which is a weird. It's a weird thing, but it's true. Like, you call. I'm sure if you go and call someone and say, great job on that deal. Great. They probably, they're telling their friend, their family, like, CEO called me and said this, you know.

Yeah, that, that is right. I mean, I spent a lot of time. We have a number of Slack channels. I spent a lot of time reading in Slack channels and then dropping notes in here and there. So acknowledging somebody who's done a good job or things that we like. But also I have, you know, obviously a CEO. You have the power to prioritize as well. So every one of our customers who goes live, we have, we monitor. We're monitoring everything that's going on, and we're monitoring how well is. What is the quality, how well is the AI, Are the handoffs happening? Well, you know, which is unique, I think, for our business, being able to see things end to end. So I'll spend time, a lot of time monitoring in those in those channels, see what's going on and sometimes you spot things, oh, maybe something's falling through a crack and that's some of the power you have. I can, I can get in there and I can get stuff solved in 5, 10 minutes, but might have taken a bit longer. So.

But it's all about using the path for good, right? Focusing on the right things.

I want to go back something you said about the outcome based pricing that you mentioned. This feels like something that everyone's, a lot of people are talking about now is like pricing is going to change. Do you believe for your business? I think what you described makes sense. Do you think this is just where the market is going, that the whole SaaS per seat model like is that going to outcome based across the board or just in the logical places like this?

There's definitely a trend towards it.

And you know, at a philosophical level it makes a lot of sense. If you think about our business, you've got an end user who just wants to get a problem solved any time of the day. Their outcome is that they can contact you and they can get their answer.

That actually doesn't match at all to the incentives of maybe a seat based SaaS product or a BPO that's charging for labor or the organization that's the client that's providing the support that is looking to get as much CSAT as possible for the most economic way. The great thing about outcome based pricing is that you can align all the way through the chain from the customer to the client to the actual providers.

The challenge that we have at the moment is that a lot of people talk about outcome based when they're just providing one small slice of the solution. So we talked earlier about say bolt on bots that talk about outcomes and they resolved so many things. But what they've also done is on the back end reduced CSAT by 10% and the rest of the business and they're not being penalized for that outcome, not being rewarded, but they're not being penalized. So I think we're seeing the beginnings of it. What we like about it for our business are two things. Firstly, we can genuinely say that an outcome is end to end right from the inception of the customer to delivery of the resolution. But the other thing I like about it is when you start a business, you actually think a lot about how do you establish things early on in the business before it gets too late. That can be formative. What are the silver bullets or what are the systemic things. And I think what we Discovered quite early on is if you charge your customers according to hours or seats, everyone in the company thinks about hours and seats because everyone in the company knows how you get paid. Whereas actually if you think about it as outcomes, if we don't get paid for a dsat, which is we don't, then everybody in the organization is motivated not to create DSATs, even if it was their fault or not.

This for me is a surprising outcome. Surprising outcome of outcome based is the way that you can use this to focus your company on the right things.

That's a good point. Right. If everyone understands, if everyone thinks in seats, you're constantly thinking, how do we get more seats on these? Basically, yeah.

I'll tell you what BPOs do. I mean, you know, BPOs, they provide labor. In the classic BPO model, companies will try and get the lowest cost labor they possibly can and for the highest quality. People now do a lot of due diligence. I go around a lot of BPOs and focus on way up. But when all you have to sell is labor.

The solution to everything is you try and sell more labor.

It's the only way to grow the account. Basically, yeah.

You say the ratio of manage or you want high quality, the ratio of people to managers needs to be one to six instead. And when you go above six and you need another manager and what you end up with is a heap of waste and hidden costs and same thing on tech by the way, the number of seats that get wasted that people aren't used, they use it. So the amount of waste in the business is huge even without AI. And so what we're finding is with outcome based, we're finding a way to eliminate a lot of that waste and then repurpose it to where it should be. And what that might mean is that you can move hours, extend hours, you can add another language, you can innovate a new function as well. And that's, that's, that's a cool outcome of outcome.

I mean the challenge, the good thing for you is that anyone, the BPO is the incumbents. You can't really do this because you literally cannibalize the entire business. I mean they can't or the whole business would collapse.

Basically, yeah. I mean changing any type of foundational pricing model is, is incredible. The way you get paid is incredibly difficult for, incredibly difficult for a company of any size. You're changing philosophies, structures, recording. Yeah, I mean, you know it, right? So you know, so I think that that's one thing and I think that we're seeing this as a challenge for a lot of the SaaS companies at the moment is a lot of them are trying to move to this model, but it's confusing for the customers about when are they paying for seats, when are they paying for usage, they want to switch from seats to usage and ultimately there's no net gain in a form of the organization. So.

It'S challenging. And again, part of the thing about building a new business is understanding the privilege that you have is to invent things in a new era. So we've invented our companies in the AI era. That means our product is fully integrated for AI and it's AI ready and based, fundamental. But it also means their economic models, you know, outcome based. The new economic model. We're born in the era of outcome based. And so we don't have the legacy that we have to deal with there either.

You've grown this fast in this period of time. Part of it has been you've acquired companies to grow this fast in this period of time. Also acquiring companies like you're like compiling every hard thing on top of itself. You know, like to do that. Like is that, do you have an M and a kind of background machinery like that you brought to the table? Is that something general catalyst, other co founders like, how have you been able to do that? How much of that have you been doing? How core is that to the strategy?

M and A is core to our strategy. I mean this is a huge market opportunity, but AI for customer service is, is a crowded market. So I mean we have amazing technology. I would say it's the best technology very often, but that in a noisy market that doesn't just automatically make you grow and successful. So you've got to have great distribution and you've got to have a unique approach to distribution. So when we founded the company, we said that, okay, we're going to try a different approach here and we're going to buy BPOs.

Labor based BPOs, and there are thousands of them. And what we'll do is that we will then help their customers upgrade to be AI native using our technology. And we'll give them lots of support and incentive in order to do that. We'll retrain the teams and we'll do everything for them to move up to that level. And that was our hypothesis. So we did that.

We've done that and we've proven it works. We have hundreds of happy customers have gone through this process. They haven't had to spend an extra dime, they haven't had to invest anything else in customer care. We just take care of it for them in the same way that we would take care of them before. So obviously that is quite unique because there's more to the simple way is just organically attract customers and then you run them through your cycle. And we do have that model. We have a lot of people coming to us. We do. But the some people call it a roll up, you know approach is a great way to get accelerated at distribution and bring the extent about our value quicker even to customers. Going back to your original question because that was part of the original philosophy. You know, Andy co founder had done, had done many acquisition deals before I integrated I think the last three or four acquisitions into Zendesk. That was part of my role at Labs when I was there. So we know a thing or two about every. Everything's unique.

But you have those muscles on the team.

Yeah you can, you know.

What to think about, you know, what actions to take because you know you're acquiring an amazing asset in the business with customers and employees and just making sure that you say you do the right things by then upfront and you obviously you have financial objectives from the acquisition but it's very tempting to be focused in the immediate term on those rather than taking care of what's really important for the long run. Which is a fast and fantastic integrated culture where people feel reassured about the future and feel very motivated about the combined offering.

It feels like in this new world, in this AI era this is a obvious like when you have a. You have the capital, when you have the team, when you have the technology. This seems like just such an. Because to the conversation we just had, the BPO can't reinvent themselves, but you can reinvent that.

That's right, the.

I mean BPOs and don't get me wrong, I mean the founders and leaders of these organizations are very impressive people. You know, they built, you know, business that have built. Built businesses tens hundreds of millions of dollars, run good operations in a short amount of time, take, take care of other people's customer care in a great way. But.

And many of them have actually created technology divisions in order to help, you know, help their customers. Very, very few, in fact I can't think of any who have succeeded in doing that. And there's just a dynamic of, you know, to attract the caliber of AI engineer that we have within our organization. It helps to be venture funded.

Yeah, that's the first.

It helps if you've got an ethos there. So crescendo very Much is this fusion of, you know, Silicon Valley, deep AI tech plus the, you know, and then we take the BPO resources and we think actually first about how do we use those people to enhance the deployment of AI. And once you get into that mindset, you're a product company that has amazing people support rather than a people company that's trying to bolt on some technology when that doesn't work.

It's only been 18 months, but I ask every guest this question. What is the biggest challenge you faced so far at Crushendo and how have you overcome that?

If you ask, I think again, I think the biggest challenge goes back to what we said before is, is just ruthless prioritization in the moment of what to focus on. But the challenge changes every, the challenges change, you know, every month, you know, and say, I mean 18 months ago I was setting up Gusto myself and probably the biggest challenge was actually trying to hand that off and remember the password and you know, make sure that that went in, that went into the operation. So you know, there's just things day to day of taking things out of that. And don't get me wrong, I'm glad I did all of that.

Maybe I would have hired a fractional CFO a little bit earlier.

When I was told the first time they said you can no longer be the admin of Google Apps, I was very upset, I was like. And then afterwards I was very happy that I wasn't the one adding users, you know, so I know the feel exactly. Where is crescendo in 2029 days like three years from today, what does the company look like?

We are a multi billion dollar organization with, you know, with one of the category leaders within this new era of AI, cx, AI, you know, the pure play platforms that are really providing this concierge level in front of companies doing customer service and shopping.

We have defined the market.

Whereby nobody would dream of now trying to assemble five or six or seven different tools and hiring a bunch of people in the same way that any mid market manufacturer now wouldn't dream of building their own production line and staffing it. And so.

We will be associated with the company that defined this new all in AI native approach whereby a customer service leader is not spending all of their day evaluating different tech and trying to piece it together and figure out where it's gone wrong and hiring people and figuring out how to staff extra shifts. They're service designers.

Like Catherine at Love park, like Anthony at Ratio, our partners there and we are the people taking care of delivering the service bond.

Okay. I want to transition to your background a little bit. Where are you from originally?

I'm from a small town in England called Gloucester, which is where I grew up. It's not incredibly well known, but unless you're into rugby, yes.

And did you grow up knowing you wanted to be in business, a leader, an entrepreneur? Was that something, you know, from an early age you knew or. Or that wasn't till later in life?

It wasn't until later in life I knew I hated school. I didn't hate it as much, but sitting down in a classroom and sitting there and studying the same thing for hours on end wasn't my gig. So I was very into doing things. I am.

I think I saw my first computer a while back, and it was in a department store.

In the uk. And for some reason, I was like a moth to a flame. I tried to stay. And I would. Every day after school, I would walk into town and I would basically hang around in the computers and play around with them. And after a while, I think they thought I worked there. And rather than throwing me out, I think I sold more computers than anybody to anybody. So they let me hang out there. And so I learned to code in a department store initially, and then gradually it convinced my parents to get me a computer. And then that was the thing that got me into college because I didn't study enough in the things I should have been studying, but I could code and.

I guess. So back to your question. I guess that was indicative of one. Is Craig or do something you actually.

Like, went to the departments to like you, you would stand there, like, run.

In front of their machines. Yeah. And just like play around with them initially and just through iteration. I mean, I didn't really. I was just like, trying to figure stuff out. I figured. I mean, I don't know, maybe I figured out there was a help commands clause and it would just.

Experiment. What does this thing do? But there was some cool stuff that happened. I then went on and started to do advanced math. And then I suddenly realized, oh, okay, now I can. What I'm learning, what I'm learning theoretically here, I can actually implement in code. And if I'm learning about I can't remember, like.

Sine waves, or.

I can use a sine wave function to do a missile game.

And adjust the variables on those things. I guess that again, that's curiosity and discovery. That's fun stuff. That's very good.

What did your parents think during that. During that time? Like, were they concerned that you weren't like doing well in school and spending all the time with the computer or was, you know.

Yeah, I mean, yeah, I think, I don't think you ought to think, really. I. They knew I was spending a lot of time in my bedroom and I think as parents, if young kids are constituted, you don't ask too many questions around them. You get them. But they were starting to see results coming. I mean, computers were pretty new at that time, so people weren't quite sure what was going on. But now I managed to hold it down enough. Enough at school. They weren't read. Thanks.

And what was your first job when you. Your first job after university or after.

Yeah, I got. I knew nothing about business or anything. I mean, I. Look, I wish I'd known what I know now. I mean, I really knew nothing about how business is creating anything. So I just, I just answered an ad in the paper for somebody to do technical support for a software company and thought, oh, I can maybe do that. And I showed up. This is serendipity. It turned out to be a company called Borland that my first job was answering tech support calls for C Turbo C compiler and Turbo PASCAL compiler, which were the huge things that made me end up. For the listener, listeners or viewers that aren't aware, you know, look up Borland and what Philippe Kahn did. An amazing entrepreneur at that time.

Three, you know, and a year later I was in the marketing team in California and because the company had grown so quickly, so. And from that group in time, the guy who ran a direct marketing was a guy called Mark Randolph. He went on to found Netflix. My lead engineer was Anders Harzberg. He became.

Essentially the guy that intervented C at Microsoft. So somehow luck was with me. I managed to get on this, what I would say before I got on. I was able to get on the right bus and get with the right people and the rest is history.

I mean, the tech support is literally full circle, basically to where you are today.

No, and I say that to the team, you know, I mean, I know what it's like. This customer service is hard. Yeah. And it's like, you know, and when we talk about AI, we talk about, okay, it's a hard job, but let's use these tools to make it easier for us. Let's make it such that it used to be that you would be a rookie in customer service and pretty much every question, many questions you didn't know the answer to. Well, now we provide our.

Associates customer service with expert assistants where they can get those answers very Quickly, you know, customers come to them less frustrated because they haven't been waiting so long on hold times.

So you actually did the job. You did the job.

What was the biggest break in your career?

Johnny's on this. It was in a 40 person company at the time.

And I wasn't even sure whether to join them. I had quite a good job CMO for a tech company, but I just started following them on Twitter as it was at the time and look into it.

And SaaS seemed really interesting. It seemed like a company was going somewhere. So it was a bit of a leap.

And then.

10 years later it's gone public. It's multibillion dollar organization. But the people though are amazing. Mikkel, the CEO, I learned so much from him. Amazing founder and lead.

Did you have a mentor or something? Have you had a mentor throughout your career or someone that's really throughout, not maybe the whole career, but just someone that you lean on and have learned from specifically? I know I'm sure many people, but.

Yeah, there are a few people. There's one person that's been consistent. I've been in touch with actually guy who I met at Borland in the early days, guy called Zach Erlocker. And Zach, I was delighted, came and helped me scale the business for a while at Crescendo as well. Zach has had an amazing career in scaling businesses. Now I think he's.

Now I think he's an operational partner, Index Ventures or something. So he's an incredibly.

Supportive person in.

Terms of like to do this job, you know, to be a CEO, to do any of the jobs, you know, but, but to be a CEO, like it's, it's, it's a lot, you know, it's a lot every day. And of course everyone's carrying the weight, but you're carrying the most of the weight on your shoulders. No matter what company it is. What is it that drives you like on a day to day basis, what is it that drives you, motivates you and keeps you like going through all the challenging times and the exhaustion and everything? Is it, what is it at the core that drives you?

I joke about this sometimes, but I'll give you an example. And it's things like this. So we have company love pop. They do greeting parts.

I love that, love that, I love that company.

Yeah, they are amazing. They have a fantastic product and actually they have a great customer service ethos. So if something goes wrong, they will fix it for you, you know. So if the car's not right, the challenge they were having before we started working with them was that even though they had great product philosophy it was hard difficult for them within company economics to staff enough people to respond immediately to customers who are having an issue. What we were able to do is take then we were able to take them from a 24 hour resolution right down to a 15 minute resolution using AI and IP plane restructuring. The outcome of this was that once we started to do it they just started getting these five star reviews on trustpilot one after another for customer service and what has happened was that in the same way you show passion for the product because it is so cool is that those people in the moment trying to get a card to somebody and if it's not going well we flipped the switch. We used abundance of AI to provide solve things for customers in that moment and.

It'S incredibly fulfilling to see wow this thing is real. We are really able to fulfill on the promise and change customer care for people forever but also change care for customer care. For now their Trustpilot ratings went from a 3.6 which is average to a 4.6 which is excellent within the space of a few weeks. And everybody who's in E commerce knows what that impact has on sales conversion. So we were able to partner Catherine there.

An amazing CX leader. We should put it with with force unfulfill and do something that has made a huge difference to consumers and also the business as well. That's incredibly much. So if I have dark moments I'll just go and read lovepop trustpilot reviews.

Last question for you. Knowing everything you know today. If you go back and give yourself one piece of advice before you started that technical support job, what would that one piece of advice be?

Think big. Yeah, just really.

I think I've probably been able to do and been able to experience so much more than I ever thought.

You know I give myself a little bit of credit of being able to seize opportunities when they've come and work hard in order to do it but.

Spend more time really just thinking about what it would take to what it would take to do something bigger and not be.

Not be bounded by.

What I thought I should be doing but really think about more of what I could be doing and what it would take to be getting good.

Way to end the episode. Matt, thank you very much for doing this. I really appreciate it. Congrats on quick success and I hope it continues. I'm excited about what you're doing and there was a lot of lot of gold in this episode. A lot of things for people to learn from. So thank you for sharing. Thank you for being transparent.

Thank you, David. Thanks to you. It's been a pleasure talking to you. A really nice hour or so we spent together.

Awesome, awesome. For those listening, I hope you enjoyed. If you did, please share this out with your networks and we'll see you for the next episode of Not Another CEO Podcast.

That's a wrap for this week's episode of Not Another CEO Podcast. Thanks for joining. For show notes and more, please Visit not another CEOPodcast.com we'll see you next week.